b) In calculating the
QIP surcharge percentage,
the utility may choose either annual prospective operation or quarterly historical
operation based on QIP investment data for a prior three-month period. Annual
prospective operation may be selected only if the utility's immediately preceding
rate case for the rate zone utilized a future test year as defined in 83 Ill. Adm.
Code
287285 and the utility submits the information required by Section
656.70(d)(76).
1) Annual Prospective Operation
Utilities choosing annual prospective operation shall determine the
QIP surcharge percentage for the operation year using the following formula:
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Where:
S% = QIP surcharge percentage.
NetQIP = The average forecasted cost of the investment in QIP for
the rate zone for the operation year less forecasted accumulated depreciation and
accumulated deferred income taxes (ADIT) in QIP for the rate zone for the operation
year. The average forecasted cost of QIP, net of depreciation and any ADIT
liabilities (net of deferred tax assets) resulting from the QIP, shall be computed
by using an average of 13 end-of-month balances of QIP, less-and accumulated
depreciation and ADIT for the period from December 31 of the year preceding the
operation year through December 31 of the operation year.
AdjNetQIP = The actual amount of netQIP as of the end of the QIP
forecast period used in the utility's last rate case for the rate zone less the
amount of NetQIP the Commission approved to be added to the utility's rate base as
of the end of the QIP forecast period.
PTR = Pre-tax return as described in Section
656.50(a)(1).
Net Dep = Net depreciation expenses related to the average
investment in QIP for the rate zone for the operation year. Depreciation expenses
shall be calculated by multiplying the average forecasted cost of the investment in
QIP by plant account, net of retirements, by the approved depreciation rates for the
respective accounts in which the specific items included in the average QIP
investment are recorded. The average forecasted cost of the investment in QIP by
plant account, net of retirements, shall be computed by using an average of 13
end-of-the-month balances of QIP by plant account and retirements for the period
from December 31 of the year preceding the operation year through December 31 of the
operation year.
AdjNetDep = The actual amount of NetDep applicable to the QIP
forecast period used in the utility's last rate case for the rate zone less the
amount of NetDep that the Commission approved for the QIP forecast period used in
the utility's last rate case for the rate zone.
R = Utility-determined reconciliation component (R component)
calculated for the reconciliation year under the reconciliation feature as described
in Section
656.80(d).
The reconciliation component shall be collected over nine months from April through
December.
O = The Commission-ordered adjustment component
(O component).
INT = The calculated interest attributable to the 0 component. This
interest shall be calculated as described in Section
656.80(i).
Om = The Commission-ordered O component multiplier.
Om is a timing factor applied to the O component and the INT to
allow for the collection of the O component and the INT over the remainder of the
operation year. For example, if the O component and the INT were included in the QIP
surcharge percentage on January 1, the Om would be 1.00. Similarly, if the O
component and the INT were included in the QIP surcharge percentage on April 1, the
Om would be 1.33.
PAR = The projected total water or sewer QIP base rate revenues, as
applicable, for the rate zone for the period from January 1 through December 31. The
projected revenue shall not include the exclusions listed in Section
656.30(a).
Following the final order in each rate case, and before the
Effective Month that will initiate the inclusion of AdjNetQIP and AdjNetDep, the
utility shall file a public document in the rate case that provides the calculation
of AdjNetQIP and AdjNetDep, including each component used to determine AdjNetQIP and
AdjNetDep.
2) Quarterly
Historical Operation
Utilities choosing quarterly historical operation shall determine
the QIP surcharge percentage for the quarter using the following formula:
Click here to view
image
Where:
S% = QIP surcharge percentage.
NetQIP = Original cost of QIP less accumulated depreciation and any
accumulated deferred income tax (ADIT) liabilities net of deferred tax assets
resulting from the QIP for the rate zone. NetQIP shall be the level of investment in
QIP existing at the end of the calendar month in which an investment sheet is filed,
net of depreciation and any ADIT liabilities (net of deferred tax assets) resulting
from the QIP.
AdjNetQIP = The actual amount of NetQIP as of the end of the QIP
forecast period used in the utility's last rate case for the rate zone less the
amount of NetQIP the Commission approved to be added to the utility's rate base as
of the end of the QIP forecast period.
PTR = Pre-tax return as described in Section
656.50(a)(1).
NetDep = Net quarterly depreciation expense applicable to NetQIP
less the quarterly depreciation applicable to the plant being retired.
AdjNetDep = The actual amount of NetDep applicable to the QIP
forecast period used in the utility's last rate case for the rate zone less the
amount of NetDep that the Commission approved for the QIP forecast period used in
the utility's last rate case for the rate zone.
R = Utility-determined reconciliation component calculated for the
reconciliation year under the reconciliation feature as described in Section
656.80(d).
The reconciliation component shall be collected over nine months from April through
December. No reconciliation component amount shall be included for the January
through March quarter.
O = Commission-ordered adjustment component.
INT = The calculated interest attributable to the O component. This
interest shall be calculated as described in Section
656.80(i).
Om = The Commission-ordered O component multiplier. Om is a timing
factor applied to the O component and the INT to allow for the collection of the O
component and the INT over the remainder of the operation year. For example, if the
O component and the INT were included in the QIP surcharge percentage on January 1,
the Om would be 0.25. Similarly, if the O component and the INT were included in the
QIP surcharge percentage on April 1, the Om would be .33.
PQR = Projected quarterly water or sewer QIP base rate revenues, as
applicable, for the rate zone during the calendar quarter when the QIP surcharge
percentage shall be in effect. The projected quarterly revenue shall not include the
exclusions listed in Section
656.30(a).
Following the final order in each rate case, and before the
Effective Month that will initiate the inclusion of AdjNetQIP and AdjNetDep, the
utility shall file a public document in the rate case that provides the calculation
of AdjNetQIP and AdjNetDep, including each component used to determine AdjNetQIP and
AdjNetDep.
